Has e-commerce really taken off in Malaysia? Difficult to say, I think.

On one hand, so many has bought airline tickets via Air Asia. On another, how many of you have bought something else online? Ask the same question to those not so tech-savvy ones and you will roughly know, it does not reach the critical mass level yet.

However, we cannot deny that there is some sort of growth in the local market, and these factors are pivotal in fulfilling the potential.

The Market

We are enjoying a steady growth of internet (broadband) penetration especially in recent years. The more people connected, the bigger the market.

Some might have concerns about online security, but I believe this is not an issue as long as there is trust between the brand and its customers. When I am paying online, I don't really care what kind of fraud prevention is in placed, as long as I am buying from someone reputable.

Of course, no online security infrastructure is 100% perfect. Come to think of that, there is risk of being robbed even when you are visiting brick and mortar stores (touch-wood).

The Players

Penetrating the market requires more players like Air Asia, and to a certain extent local e-commerce players like these. We are observing more businesses expanding their sales channel via online presence, but...

Some are doing it blindly...

There are many factors to consider before venturing into B2C in Malaysia (or any other places). But, the basic rule of thumb for me is the product / service sold online is not easily available, OR cheaper (at least not more expensive), compared to the offline channels.

Of course, there are some exceptional cases or business models.

Some are not utilizing their online presence well enough...

Scenario 1
Retailer A has a website, but it is not facilitated with e-commerce.

Scenario 2
Retailer B has a website with e-commerce, but...
1. Not all products / services are available online.
2. There are not enough resources supplemented to convince buying.
3. Website is badly designed, cluttered, or in short, bad web usability.
4. Users are not confident enough in the store's brand to buy online.

Some good ones unable to reach big enough audience...

Marketing, you might say. However, not all online retailers (especially the smaller ones) are allocating significant fund for it.

SEO, you might say. Google might be a god-send information aggregator, but it is not a product aggregator especially for those non-US markets. It would not be as efficient if you are to search and compare products among local stores, therefore dampens the buying desire and decision.

So, how do online stores reach out to audience other than the above approaches? How to help users make buying decision? Keyword: Aggregators.

The e-commerce SaaS model can be one of them, if implemented smartly. Imagine the brick and mortars, where do you prefer to shop? The Mid Valley Megamall, or some scattered boutiques? It seems to be great on paper, the almost everything-under-one-roof concept. But, there are quite some challenges which I can write another post to debate on it.

I will, however, prefer to continue with the next post on another type of aggregator. Stay tuned!

Next: Price Comparison Service in Malaysia?